Editor's Note:

The market's rally attempt this morning ran out of fuel and stocks drifted lower into the closing bell.

We did see both PVH and SBAC hit our triggers to buy calls.

Current Portfolio:


CALL Play Updates

BRCM - Broadcom - close: 34.41 change: -0.70

Stop Loss: 33.25
Target(s): 38.50
Current Option Gain/Loss: -12.7%
Time Frame: 4-6 weeks
New Positions: see below

Comments:
08/14/12 update: Today was not a good day for BRCM. The early morning rally attempt failed and shares dropped -1.99%. Furthermore today's move has created a bearish engulfing candlestick reversal pattern. Now these patterns need to see confirmation but it's a warning sign. Readers may want to cinch up their stop loss closer to the $34 level. I am not suggesting new positions at this time.

- Suggested Positions -

Position: Nov $36.00 Call (BRCM1217K36) entry $1.80

08/08/12 new stop loss @ 33.25
no follow through, turning cautious
08/07/12 triggered @ $34.75
08/06/12 adjust stop loss to $32.45

Entry on August 07 at $34.75
Average Daily Volume = 10 million
Earnings Oct-23rd
Listed on Aug 4, 2012


Caterpillar - CAT - close: 87.87 change: -0.74

Stop Loss: 85.90
Target(s): 91.50
Current Option Gain/Loss: -11.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/14/12 update: CAT could be flashing a caution signal here. The rally failed at the $90 level this morning. I have previously warned readers that $90.00 could be overhead resistance. Today's failure has created a bearish engulfing candlestick reversal pattern. Readers may want to raise their stop loss even higher. I am expecting a dip to the 10-dma. I am not suggesting new positions at current levels.

Earlier Comments:
I do consider this somewhat aggressive. CAT's recent earnings were strong and the company raised guidance but its stock price is probably still vulnerable to negative economic headlines. Furthermore the $90.00 level might be round-number resistance.

- Suggested (SMALL) Positions -

Long Sep $90 call (CAT1222I90) Entry $1.90

08/13/12 new stop loss @ 85.90
08/07/12 triggered @ $87.25

Entry on August 07 at $87.25
Average Daily Volume = 8.6 million
Listed on August 6, 2012


Celgene Corp. - CELG - close: 71.12 change: -0.73

Stop Loss: 69.90
Target(s): 75.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
08/14/12 update: CELG failed at resistance near $72.00 again. The stock continues to churn sideways in the $71-72 range. The plan is to wait for a breakout higher. I am suggesting a trigger to buy calls at $72.25. Our target is $75.75.

FYI: The Point & Figure chart for CELG is bullish with an $81 target.

Trigger @ 72.25

- Suggested Positions -

buy the Sep $75 call (CELG1222I75)

Entry on August xx at $ xx.xx
Average Daily Volume = 3.4 million
Listed on August 7, 2012


Concur Technologies - CNQR - close: 69.22 change: +0.00

Stop Loss: 67.65
Target(s): 74.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
08/14/12 update: CNQR held up reasonably well. Shares drifted sideways in a narrow range and closed unchanged on the session.

I am suggesting a trigger to buy calls at $70.25. We'll use a stop loss at $67.65 (under today's low). Our target is $74.75.

Trigger @ 70.25

- Suggested Positions -

buy the Sep $75 call (CNQR1222i75) current ask $1.05

- or -

buy the Nov $75 call (CNQR1217j75) current ask $3.00

Entry on August xx at $ xx.xx
Average Daily Volume = 577 thousand
Listed on August 13, 2012


PVH Corp. - PVH - close: 85.27 change: +0.37

Stop Loss: 82.65
Target(s): 91.50
Current Option Gain/Loss: -12.8%
Time Frame: exit prior to the Aug 27th earnings report
New Positions: see below

Comments:
08/14/12 update: PVH displayed a little relative strength today with a +0.4% gain. The stock also broke out past resistance near $85.00. Our trigger to buy calls was $85.25 but PVH actually gapped open higher at $85.62 this morning.

Earlier Comments:
The $90.00 level could be resistance but we will aim for the 2012 highs near $92.00. FYI: The Point & Figure chart for PVH is bullish with a $97 target.

- Suggested Positions -

Long Sep $87.50 call (PVH1222i87.5) Entry $3.27

08/14/12 triggered on gap open at $85.62 (trigger was 85.25)

Entry on August 14 at $85.62
Average Daily Volume = 845 thousand
Listed on August 13, 2012


Qualcomm - QCOM - close: 62.39 change: +0.29

Stop Loss: 57.75
Target(s): 64.50
Current Option Gain/Loss: +31.1%
Time Frame: 4-6 weeks
New Positions: see below

Comments:
08/14/12 update: Another day, another gain for QCOM. Shares closed above short-term resistance at $62.00. Yet today's intraday pullback almost makes today look like a short-term top. I am not suggesting new positions at this time. More conservative traders may want to start adjusting their stop loss higher.

- Suggested Positions -

Position: Oct $62.50 Call (QCOM1222J62.5) entry $1.70

08/07/12 triggered @ 60.51

Entry on August 07 at $60.51
Average Daily Volume = 1.5 million
Listed on Aug 4, 2012


SBA Communications - SBAC - close: 60.62 change: +0.22

Stop Loss: 57.75
Target(s): 64.90
Current Option Gain/Loss: Sep60c: - 7.8% & Dec65c: -11.5%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
08/14/12 update: SBAC is also showing some relative strength with a +0.3% gain. The stock hit our trigger to buy calls at $60.75 this afternoon.

Our multi-week target is $64.90. We might need some patience on this one. SBAC doesn't move super fast. FYI: The Point & Figure chart for SBAC is bullish with a long-term $100 target.

- Suggested Positions -

Long Sep $60 call (SBAC1222i60) Entry $1.90

- or -

Long Dec $65 call (SBAC1222L65) Entry $1.30

08/14/12 triggered @ 60.75

Entry on August 14 at $60.75
Average Daily Volume = 1.5 million
Listed on August 11, 2012


WellPoint Inc. - WLP - close: 56.90 change: +0.01

Stop Loss: 54.40
Target(s): 59.75
Current Option Gain/Loss: - 0.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/14/12 update: Traders sold the bounce this morning and WLP closed virtually unchanged on the day. It looks like shares are in a new short-term $56-58 trading range.

I am not suggesting new positions at this time.

- Suggested Positions -

Long Sep $57.50 call (WLP1222I57.5) Entry $1.60

08/08/12 triggered @ 56.50

Entry on August 08 at $56.50
Average Daily Volume = 4.4 million
Listed on August 7, 2012


PUT Play Updates

Edwards Lifesciences - EW - close: 97.57 change: -0.29

Stop Loss: 100.25
Target(s): 91.50
Current Option Gain/Loss: -16.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/14/12 update: Traders were also selling the bounce in EW this morning. I would still consider new bearish positions at current levels. FYI: The Point & Figure chart for EW is bearish with an $86 target.

- Suggested Positions -

Long Sep $95 PUT (EW1222u95) Entry $2.70

08/13/12 trade opened on gap down at $97.66 (trigger was 97.75)

Entry on August 13 at $97.66
Average Daily Volume = 950 thousand
Listed on August 9, 2012


FB - Facebook - close: 20.38 change: -1.22

Stop Loss: 23.25
Target(s): 17.00
Time Frame: 2-4 weeks
Current Option Gain/Loss: - 3.4%
New Positions: see below

Comments:
08/14/12 update: Shares of FB underperformed today as we get closer to the next share lock up expiration (which is tomorrow). The stock fell -5.6% and is now retesting round-number support at the $20.00 mark.

Earlier Comments:
Facebook has turned into the stock everyone loves to hate. Facebook has 674 million shares outstanding as of Friday. On August 15th another 268 million shares will see their lockup expire and become available for trading. That is 40% additional shares. If you were an investor or employee and you watched your shares decline from $35 to $20 ahead of your lockup expiration you are probably just waiting for an opportunity to sell. Another factor is that taxes are due on the awarded shares regardless of whether they are sold. That means employees have a big tax bill and they have not been able to sell those shares to pay the taxes. That is an additional incentive to pull the trigger on at least part of their position on August 15th.

Facebook has hundreds of detractors and they seem to be racing each other trying to put a lower price target on the stock. Mark Hulbert was on CNBC on Friday with a $13.80 price target based on a bunch of different metrics.

Facebook also has the various lawsuits over the IPO including the valuation and the various claims made about users and revenue in the days leading up to the IPO. There are plenty of clouds and no real catalysts to pump up the stock.

Facebook said expenses grew by 60% in Q2 and they would grow faster in Q3/Q4. That means earnings will decline.

I am recommending a September option with plans to exit (some time) after the August 15th share lock up expiration.

Suggested Positions

current position: Sept $20 PUT (FB1220U20) entry $1.45

08/07/12 triggered @ 20.95
08/06/12 adjust entry trigger to $20.95

Entry on August 07 at $20.95
Average Daily Volume = 80.0 million
Listed on August 5, 2012


iShares Russell 2000 ETF - IWM - close: 79.60 change: -0.19

Stop Loss: 80.75
Target(s): 76.50
Time Frame: 3-5 weeks
Current Option Gain/Loss: - 5.0%
New Positions: see below

Comments:
08/14/12 update: The small caps tried to rally this morning. The IWM actually gapped open higher but the rally quickly lost steam. The high today was only $80.42.

Our plan was to keep our position size small to limit our risk.

- Suggested (SMALL) Positions -

Long Oct $78 PUT (IWM1220V78) Entry $2.60

08/13/12 triggered @ 79.40
08/08/12 Adjust entry/stop/exit
Use a trigger @ 79.40, stop @ 80.75, target 76.50. Small Positions Only!
08/07/12 adjust trigger to buy puts up to $78.90

Entry on August 13 at $79.40
Average Daily Volume = 60.0 million
Listed on August 5, 2012


O'Reilly Automotive - ORLY - close: 84.64 change: -0.31

Stop Loss: 84.75
Target(s): 80.25
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
08/14/12 update: The rebound in ORLY this morning failed near $86 and its exponential 200-dma. Aggressive traders could buy puts now. I am suggesting we wait for a breakdown to new relative lows.

We have a trigger to buy puts at $83.75. Our first target is $80.25. More aggressive traders may want to aim lower. FYI: The Point & Figure chart for ORLY is bearish with a long-term $48 target.

Trigger @ 83.75

- Suggested Positions -

buy the Sept $80 PUT (ORLY1222u80)

Entry on August xx at $ xx.xx
Average Daily Volume = 1.5 million
Listed on August 11, 2012


Vornado Realty Trust - VNO - close: 81.02 change: +0.26

Stop Loss: 80.55
Target(s): 72.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 5 weeks
New Positions: Yes, see below

Comments:
08/14/12 update: The oversold bounce in VNO is testing short-term resistance near its July lows near $81 and its simple 200-dma. Currently we are waiting for a breakdown to new relative lows.

I am suggesting a trigger to open bearish positions at $78.45. Our target is $72.50 but keep in mind that the $75.00 level might be round-number support. FYI: The Point & Figure chart for VNO is bearish with a $74 target.

Trigger @ 78.45

- Suggested Positions -

buy the Sep $75 PUT (VNO1222u75)

Entry on August xx at $ xx.xx
Average Daily Volume = 943 thousand
Listed on August 9, 2012